MKTG806 - Tesla Case: Applying Marketing Strategy Concepts

This case study analyzes Tesla's marketing strategies, focusing on the challenges and decisions highlighted in the "Can Tesla Avoid a Breakdown?" report. It examines how marketing strategy concepts and theories explain Tesla's decisions, particularly regarding communication with stakeholders and promotional activities for the Model 3. The analysis includes an assessment of Tesla's internal and external environments, utilizing frameworks like Porter's Five Forces and SWOT analysis to understand the competitive landscape and factors influencing Tesla's performance. The study also explores potential future challenges, such as production constraints and the need for enhanced digital promotion and technological innovation, to maintain a competitive edge. The document emphasizes the importance of stakeholder involvement and suggests improvements in marketing communication to support Tesla's growth and sustainability. Desklib offers a range of similar case studies and resources for students.

Running head: MARKETING MANAGEMENT AT TESLA
MARKETING MANAGEMENT AT TESLA
Name of the student
Name of the university
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Introduction
The growth of the organization is dependent on the involvement of the relevant
stakeholders in the processes of the business operations. The different marketing and
promotional approaches that are undertaken by the businesses helps in maintaining the
sustainability of the same. The report “Can Tesla Avoid a Breakdown?” projected the offhand
behavior of the CEO Elon Musk towards the analysts. On the other hand, he refused to reveal
different details of the company’s monetary situation to the stakeholders, which has affected the
involvement of the same as per the growth objectives of the business. The promotion of the
Model 3 of Tesla is thereby affected by the vague answers that were given by Musk. Tesla’s
stock dropped by 6%, as the suitable promotional activities that were planned by the organization
was affected by the lack of marketing communication systems (Gao-gao, Chang-jie & Qing-
yun, 2012). The stakeholders, specifically the investors invest on the progresses of the business
through a thorough knowledge on the position of the business while operating in the international
markets. However, the lack of proper knowledge transfer and refusal to share the financial and
technical status of the organization with the stakeholders of the business has affected the
involvement of the same.
The discussion will be aiming at analyzing the internal and the external environments of
the business. The research will also portray the different recommended strategies that might be
undertaken by Tesla in order to promote the Model 3 in a more efficient manner and thereby
enhance the involvement of the stakeholders in the processes.
Marketing strategy using appropriate frameworks

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Efficient marketing strategies have helped the organization in identifying the demand of
the customers and the different market segments. Tesla has undertaken market survey in order to
identify their target customers who are the successful business executives and entrepreneurs. The
target customers of the organization are generally the upper middle class and the middle class
segment of the society with high affordability for the electric motors. Moreover, Nykvist and
Nilsson (2015) stated that the segmentation of the customers is based on their typical incomes of
over $ 100,000 or more. However, with time the organization has brought about changes in their
pricing strategies, which has helped in making the cars more affordable for the other segments of
the markets. It has helped the business in upholding the uniformity of the demand in the
international markets. The major aim of the organization is to reach out the eco- friendly cars to
the people in order to promote the green approach.
The strategies that are undertaken by the business have helped the same in enhancing the
sales volume of the business while operating in the international markets. Cardoso, Nishi and
Guimarães (2016) stated that the easy availability of the cars due to the reduction of the prices
has made the cars more affordable for even the middle income rated people. The strategies of the
business has helped in maintaining proficiency of the changes in the systems of the business as
per the objectives. On the other hand, the digital promotional activities that are planned by the
business has supported the growth of the same while operating in the highly competitive regions.
On the other hand, the Porter’s five- force analysis of the organization has helped in
enumerating the competition that is faced by Tesla and the different supplier and consumer
bargaining powers that shapes the promotional and product development factors. Tesla faces an
intense competition in the electronic car developing markets, as there are different other
manufacturers of the electronic vehicles. Therefore, the organization must take steps to bring in

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changes in the promotional methods in order to cope up with the increasing competition in the
diversified international markets. The bargaining power of the consumers depends on the low
switching costs, which is taken to be a moderate force that justifies the performance of the
business. The availability of substitutes in the market is lower which has helped in maintaining
the smooth functioning of the systems of the business while operating in the international
markets. Tesla’s operations are mainly based on the supplies that are given by the suppliers in
continuous intervals. It has helped in upholding the operational integrity of the systems of the
business while operating in the international markets. Therefore, the organization has taken
steps to maintain proper relations with the suppliers in order to support the smooth functioning of
the processes of the business (Wang & Liu, 2014). The threat of new entrants is a negligible
force which is faced by the organization as there are relatively lower amount of manufacturing
units who are focused on creating electronic motors due to the high cost of machineries required
for the manufacturing process.
External and internal environmental analysis
The strategies that formed by the organizations are mostly dependent on the evaluation of
the internal and external environments. The internal and external environmental analysis
undertaken by the organization helps in identifying the position of the organization in the market
and thereby bring in changes in the operating systems in order to gain a competitive advantage
while operating in the different markets.
Strengths
 Brand image
 Continuous innovative approach of the
Weaknesses
 High Cost vehicles affecting the
affordability of the commoners

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organization
 Technological expertise
 Growth in the sales volume
 Limited presence in the markets
 High competition among the small
amount of competitors
 Higher production and operating costs
Opportunities
 Growing demand of the sustainable
commodities
 Introduction of autonomous
technologies
 Low priced models for the middle
income people
Threats
 Legislative regulations and
environment protection acts often
constrains the functioning of the
business
 High competition in the market
 Lower promotional practices through
digital media (Wang & Liu, 2014)
The identification of the internal strengths and competencies of the organization helps in
upholding the proper processing of the business. As per the case, Tesla must take steps to
develop a suitable digital promotional media in order to bring in changes in the systems of the
business while operating in the international markets. The continuous innovative approach of the
organization and the automation of the driving technologies will be maximizing the scopes of
expansion of the business. However, promotion of the same in the international markets will be
helping the organization in maintaining the proficiency of the functions as pr the objectives of
the business (Daxing, 2015). The organization has also taken the initiative of creating electronic
vehicles at a much lower price, which will be helping the same in maintaining a larger customer
base. It will be helping the organization in making an expansion of the ventures. In order to cope

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up with the high level of competition in the markets, the organization has undertaken continuous
innovative approach. The continuous innovations that are undertaken by the organization
supported the sustenance of the same. The most important threat that is faced by the organization
is due to the lack of proper promotional practices, which has affected its marketing functions
greatly. Lack of proper knowledge of the organizational undertakings and financial standings of
the business has affected the involvement of the stakeholders and investors in the processes of
the business. It has greatly affected the functioning of the business while considering its concerns
of sustaining the intense market competition. Cardoso, Nishi and Guimarães (2016) stated that
the proper functioning of the business processes is supported through the marketing and
promotional activities. Therefore, the organization must take steps to develop suitable
promotional technologies in order to support the performance and sustenance in the competitive
market situations.
Political  Governmental incentives that are
delivered to the organization for the
growth of the sustainable electronic
vehicles
 Global trade agreements has enhanced
the scopes of the organizational
expansions
 Political stability in most of markets
has helped in the growth of the
businesses (Kreiner et al., 2012)
Economic  Decreasing costs of installing

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renewable energies
 Fluctuations in the global economies
mostly due to the Brexit effect has led
the organization to undertake a price
hike by 5% at UK in order to
compensate with the falling pound’s
value (News, 2018).
 The decreasing battery costs have
helped the organization in minimizing
the costs of operations, which has
helped the business in minimizing the
cost of each cars.
Social  Increasing awareness among the people
in the different markets and their
inclination towards reducing the carbon
emissions holds opportunities for
growth in the diverse markets. The
change in the systems of the business
will be based on the change in the
preferences of the customers (Van
Wiemeersch, 2014).
Technological  Technological advancements have
helped the organization in maintaining

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their sustenance in the different
markets. The adaptability of the people
to the different emerging technologies
has helped in maintaining the congruity
between the changes and the
preferences of the customers (Stolze,
2014).
 Automation of the business
applications has provided the
organization with scopes of expansion
(Chen & Perez, 2018).
Environmental  Expansion of the environmental
legislations will be affecting the
operations of the organization. The
different processes that are undertaken
by the organization might emit a
considerable amount of waste that
might contaminate the region (Moritz et
al., 2015). However, the waste is
insignificant, as the organization
utilizes different filtration methods
before disposing the wastes in the open
environment (D'Hooge et al., 2012).

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However, the different waste
management regulations that are
proposed by the environment
departments might affect the smooth
functioning of the businesses.
Legal  Different energy consumption
regulations that are imposed by the
governments affects the proper
functioning of the systems of the
business while operating in the
international markets (Martin, 2014).
 The different trade acts and regulations
also affected the proper functioning of
the systems of the business while
operating in the international markets.
The expansion of the business is based on the wide acceptance of the eco- friendly
techniques that are undertaken by the businesses while operating in the international markets. On
the other hand, the smooth operations of the business are based on the continuous innovations
that re undertaken by the businesses. However, the organization must take steps to utilize the
social media channels in order to promote their pro duct offerings (Stringham, Miller & Clark,
2015). It will be helping the organization in making most of its target customers aware of their
accomplishments. The utilization of digital promotions will be helping the organization in

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making their progression while operating in the international markets. On the other hand,
Hardman, Shiu and Steinberger-Wilckens (2015) stated that the organization must also take
steps to innovate more n the automation technology of the cars which will be helping the
business in maintaining a competitive edge over the other players in the market.
Factors that might affect Tesla in the future
The factors that might be affecting the organizational performance in the future are due to
the slow production process of the cars. The different threats that are faced by the organization
are due to the huge demand that is faced by the organization and the inability of the business to
meet up with the demands for insufficient resources. Nykvist and Nilsson (2015) stated that the
proper functioning of the systems is based on the financial plans of the business. In this regards,
the organization’s long term financial planning is based on the sales of the Model S which will
be boosting the activities planned by the business. In order to meet the demand of the customers,
the organization must take steps to compound its productivity (Mangram, 2012). On the other
hand, the sustenance of the business is based on the continuous innovative approach of the
organization while operating in the international markets.
Conclusion
Therefore, from the above analysis it can be stated that apart from continuous innovations
and eco friendly approach, the organization must also focus on the promotional techniques in
order to maximize awareness among the customers of their venture. On the other hand, the
internal and external environmental analysis has emerged the issue of the production lag of the
business, which has affected the demand. Therefore, the strategies that are planned by the
organization is being stated in a part of the discussion, which will be helping the organization in

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optimizing its productivity and thereby bring in changes in the systems of the business while
operating in the international markets.

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References
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Chen, Y. & Perez, Y., (2018). Business model design: lessons learned from Tesla Motors.
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